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Mukesh Ambani’s Reliance Industries will buy out Paramount Global’s stake in its Indian TV business for more than $500mn, with the tycoon tightening his hold over the country’s fast-growing media market following a multibillion-dollar deal with Disney.
Paramount said in a regulatory filing that it had agreed to sell its 13 per cent stake in Viacom18, a joint venture with Reliance, for Rs42.86bn ($517mn). The move comes just two weeks after Disney agreed to merge its Indian business with Reliance in an $8.5bn deal.
The deals have in a matter of weeks turned Reliance into the dominant force in Indian media, a market that has excited investors and analysts around the world as rising incomes in the country of 1.4bn allow many to start watching TV and streaming mobile video.
Yet India has proved a particularly difficult market for Hollywood studios to crack, with Paramount and Disney joining other foreign media groups, including Warner Bros, in scaling back their presence in the country.
For all its growth, Hollywood studios have struggled to reconcile the high costs of making content with low Indian user revenues, leading to losses that have concerned shareholders eager to control cash burn. Foreign studios have also faced fierce competition from local media groups including Reliance, prompting them to form joint ventures or exit altogether.
A deal between Sony and Indian group Zee to create a media powerhouse that would have rivalled the new Reliance-Disney entity fell apart this year.
The agreement with Paramount will increase Reliance’s stake in Viacom18 to 70 per cent, with the remainder held by investors including James Murdoch and Uday Shankar, a former Disney India executive.
Viacom18 owns dozens of TV channels and holds the digital rights to stream the wildly popular Indian Premier League cricket tournament through 2027. Paramount said in the statement that it would continue to license its content to Viacom18.
Analysts at Elara Capital last month said the merger between Reliance and Disney gave the new group about a 40 per cent share of the Indian TV and streaming advertising market.
Ambani’s long-running strategy is to diversify Reliance, one of India’s largest conglomerates, beyond its core assets in oil and gas refining into consumer-facing digital businesses.
Ambani’s telecoms arm Jio has over the past decade become the country’s largest by offering cheap data, in turn fuelling the growth of mobile video and other digital services, an area in which Reliance is trying to expand. These services range from ecommerce to home broadband. Viacom18 also owns a streaming platform, JioCinema.
